THE HOUSE

Dominion, Volume 9, Issue 2823, 14 July 1916, Page 6

THE HOUSE

The House of Representatives met at 2.30 p.m. The Wairaif TlarLour Loan Enabling Bill (Mr. R. M'Callum) was read a first .time. The whole of the afternoon was occupied with a discussion on a Native land report which was brought up by the Minister of Native Affairs.

FINANCE BILL DISCUSSION IN COMMITTEE PROPOSED AMENDMENTS i. -A'tho craning Bitting the amendment* to the linanco Bill ivere introduced by Governor's Message. Mr. J. M'Combs asked what was going to be done by the Government in regard to rents. He cited a case in Wellington in which hi said a tenant, a woman, had had her rent raised twice since the Government had first announced that it intended to deal with the rent question. Sir Joseph Ward said that as already intimated the Government intended to deaU with the question of rents. The Bill was -awaiting the decision of the Cabinet, and it would be considered in « day or two. It was hoped that the Bill would protect the. interests of all concerned. Sir Joseph Ward said that when the Finance Bill had been put through Committee be proposed to ask the House to adjourn and to take the third reading to-morrow. He saw 110 reason, in .view of the new amendments, why there should be a prolonged discussion on the Committee stage. A general discussion .00 the short title of the Bill ensued. In reply to Dr. A. K. Newman, Sir Joseph Ward said-that ono of the new proposed clauses gave power to the Minister of Finance to arrange an apportionment with the Chancellor of the Exchequer in cases where double' taxation was levied on companies whose head offices were in Great: Britain, but whose incomes were earned in New Zealand. Mr. Anderson asked whether it was intended to lelieve fro 11 income tax the interest derived from the investment of patriotic funds. - Sir Joseph Ward said that such moneys would be exempted from taxation. Sir Joseph Ward, in reply to_ Mr. Sidey, said that an annuity of which a person bad become possessed since the outbreak of, the war would be counted as income. It was only fair that it fhould be so. Young Professional Men. IIY. E. A. Wright asked whether the allowance of <£600 in the case of. young professional men would ba allowed to each partner of a firm. Sir Joseph Ward said that it was pronosed {hat each nartner should be entitled to a deduction up to The proposal in the Bill referred to only new businesses. • Mr. Hindmarsh said that the House in some way would induce the Minister of Finance to' make provision against "shirkers",' in refrard to military service. He referred- to single professional men who were making large profits owing to competitors wing to the war. Mt. Nosworthv: Hid you not vote against the Military Service Bill? Mr. Hindmarsh: Tes; on account of the wav in which it was brought down. The Chairman of Committees pointed ont that references to the Military-Ser-vice Hill were not in order. , Sir Joseph Ward said there were many professional men who started practice pome years prior to the war who up till the war had made only small incomes. -If there were no provision for a deduction of .£6OO, some men would have to pay income tax on more than they earned in a year or in two years before the war. Some of these men had ofTered their services at the front, and were waiting to be called up. Others were married, and the partners of ntheis had trone to the war. Mr. C. A Wilkinson referred to the case of a firm which in five years prior to tho war made a loss in every year except. one, and since the war there had bow a much larger profit. There shonlil be provision . for fair treatment in such a case.

Mr. J. Vigor Brown spoke of the ease of a medical urnetictloner whose ineomc may hare "gone lip very rapidly and suddenly after the war, as a result of so many doctors qoine to the war. Sir Joseph Ward wid that, a man whose income went up, in the way stated would have to nay war profits on the extra amount. Provision was made for meeting such oases as those mentioned by Mr. '\Villrin?OL'. Mr. E. Poland supported (he remarks of Mr. Hindmarsh regarding eligible .single men who were remaining at honip instead of poins to the war, and had thereby made largely-increased profits, fto exemption should bo made in favour of such men. ' Mr. TTindnvarsh said .lie was not referring to married men. Many of the single, professional men had gone to the war, and it. was a nico reward to (hem that, not only should their, businesses be taken by shirkers, but that the lattor should be relieved of their fair share of taxation. Such a thi"? should be guarded against under tho Bill by a •ipncial clause. Mr. 1,. M. Isitt said that ho knew manv eases in which hardship would be entailed upon professional men if the tiroposed exemption were not made. At the same time he agreed with a great dea! "that Mr. Hindmarsh had said. There was a great deal of feeling in regard to some young lawyers who had remained at home whilst others had gone to the war. Dr. Newman said that some of these voung men could not get away to the front, and there were cases in which the prouosed special provision was needed. Sir .Tosenh Ward said that a single man would not receive the benefit, of the exemption clause unless there wore cir-r-nmstanops warranting if. The exemptions would not be allowed without proper inquiry." If they put in tho Bill «nch conditions as sug"ested, many men might bo ruined. Tho clause dealt only with young businesses. If the full *S per cent, of excess profit were exacted, the resnlt would be very serious to the finances of many men. At the tame time it. was not tho business of the Commissioner of Taxes to give the exemption to any man who was not

entitled to it. He could not consent to adopt Mr.- Hindmarsh's' amendment. Mr. Q. Witty said that if the suggested amendment were made there woiild BtiU be tho, right to appeal. Mr. J. M.'Combs said that there .were singlo men who had responsibilities as freat as those of married men. Mr. 13.. Newman said many of the • young'men who had notgono' to the war had good reasonj for not going. He thought that the amendments just introduced had. removed most of the ground for criticising; the 1 Bill. Mr. Pearco said that - sonie of the amendments had ' considerably improved the Bill, but ho-drew attention to the fact that it was still, proposed' to givo power to.; regulate the rate of interest that might be paid on money invested on mortgage. Why should there be such : a restriction? • , Joseph said that it was de- . sirablo to retain the; provision, but ho , would, bo quite prepared to hear argument on the point, when the clause was discussed. ; Several other clauses wero criticised by. members, but Sir Joseph Ward said ho would reserve his explanations until t'he clauses were reached. Air. Pearea referred to Clause'3l; which provides, for power to issue debentures in payment for land. -He doubted •.■whether.it. would bV.wise-.'to issuo such a large amount in debentures, as it seemed might bo issued under this clause. Sir Joseph Ward , said that, this provision was necessary it'the policy of purchasing. lands for- settlement was to be . continued. -After further debate, tho shost-title was ■agreed to at' 11.5 p.m:: ■ Mr. J. if'C'onibs. (Ljitolton) objectedto an amendment to. Clause 2 to provide that "the incomo on which , tax is-pay-able" means the: taxable income,. less tho amount paid as excess profits duty, as being an. unduei. reduction. of what was .promised in ihe Budtfet. : Sir Joseph Ward explained that no reduction .was .being. The: alteration effected only an improvement ill tho methods of collection, and' prevented the Dopartment from first collocting a sum and afterwards refunding itl- The aim' was to prevent the i 5 per'oent. tax and the incomo tax being paid' in respect of 6imilar sums. ■ Mr. M'Combs said he would vote igajnst ,the proposal,: and challenged a division, when the amendment: was .niadeby 52 votes to 4. • ' ." The Special Ineome Tax. On the amendment altering the a per cent, special income tax to. Gd. in the ,£ on inoomos up 'to.iSWlO.r and. Is. in the .81 thorcafter, Mr." J. A.naley protested' against the "differentiation,", which ho said was not graduation' in tho true sense. .Mr. J. A. Young (Waikato) expressed his appreciation of; the made to secure: modification' for those receiving smaller incomes. . Mr. G.: Witty (Riccarton) suggested that tho straight ;jump to Is. in tho .S on incomes abovo; -£900 was unfair, and it , would bo bettor to allow the. man to. pay 6d. on .£6OO and-,15.-on. the remaining .£3OO. ■ The Minister ropliei that this -,was not iin income tax in the ordinary isenso,; but ' a war tax. , The break, had; to bo made. somewhere, and he could not graduation.'. This tax .was: uked'for for only one year, and as such should not be objected to. Hfe had endeavoured to meet .objections which had been made, but at the'same time 'lie would-think very little of a man who -would, not contribute will-: ingly to the war' for one -year. He certainly could-, not agree to-the suggestion made by Mr. Witty. :"v. r. : Mr.; G. :TJ. -Forbes (Hurunui). depre-. cated the concession being mode at all. The. country need not.lose, all the revenue. . which tbis would involve. He was/quite satisfied that tho people under JE9OO were not \ complaining of tho shilling tat imposed upon ; themselves, but or the .inequality in others with higher. incomes not being more heavily taxed. If the tax : were made Is. Cd. in the £ above £900' . they would bo satisfied.'.Did the Minis-, ter of know, what theso concessionsproposed involved?-: Sir Joseph Ward: Oh, yes, and tho estimated revenue is assured. Mr. C. A. Wilkinson (Egmont)'- "said the anomaly was really hot' worth troubling; about, for to a man receiving- .£I2OO a year (and being; taxed : on-:£900 of'it) the .£22 ■ 10s.- -'involved' would" create' no', trouble- ■ i ; ... ■ The amendment was "' agreed to.' (Left, sitting.)